VALLEY FORGE, Pa.--(BUSINESS WIRE)--UGI Corporation (NYSE: UGI) today reported a GAAP net loss attributable
to UGI of $19.0 million, or $0.11 per diluted share, for the fiscal
quarter ended June 30, 2017, compared to GAAP net income of $60.7
million, or $0.34 per diluted share, for the fiscal quarter ended June
30, 2016. Adjusted net income attributable to UGI was $16.6 million, or
$0.09 per diluted share, compared to $40.0 million, or $0.23 per diluted
share, for the quarters ended June 30, 2017 and 2016, respectively.
Adjusted net income excludes the impact of unrealized gains and losses
on commodity and certain foreign currency derivative instruments,
integration expenses associated with the Finagaz acquisition, and losses
on early extinguishments of debt.

Adjusted earnings were in line with historical third quarter levels
although lower than the prior year due to two factors. Weather was
warmer than the prior year for all UGI businesses, especially in the
critical shoulder month of April which accounts for most of the heating
degree days in the quarter. Additionally, the company experienced
declining LPG costs in Europe in the prior year that provided a
temporary margin increase, a trend which reversed in this quarter as
propane and butane costs in Europe were 22% and 28% higher,
respectively, than the prior-year levels. Partially offsetting the
impact of weather and LPG costs were the impacts of customer growth
across our utilities, new base rates at UGI Gas, higher peaking margin,
growth in AmeriGas ACE and national accounts programs, and the
realization of synergies from the Finagaz acquisition.

John L. Walsh, president and chief executive officer of UGI, commented,
"Our teams did an outstanding job this quarter. By managing costs and
maintaining our focus on operational efficiency we were able to meet the
challenges of warm weather and higher commodity costs. In addition, we
were pleased to mark progress on several growth projects. Our Midstream
& Marketing business placed its Manning LNG facility into service on
July 1st. Our Utility reached agreement on its PNG base rate case and
filed a Joint Petition for Approval with the Pennsylvania PUC on June
30th. Under the terms of the settlement agreement, UGI PNG would be
permitted to increase base rates by $11.25 million and we anticipate new
rates going into effect in mid-October. Our UGI International business
closed a small acquisition in Sweden and the pipeline of opportunities
remains strong. Finally, AmeriGas marked strong growth in its cylinder
exchange and national accounts programs and closed three acquisitions in
the quarter."

Based on year-to-date results, UGI expects full year adjusted EPS to be
at, or slightly below, its guidance range of $2.30 to $2.45.

Segment Performance (millions, except where otherwise indicated)

AmeriGas Propane1:

For the fiscal quarter ended June 30,

2017

2016

Increase (Decrease)

Revenues

$

467.5

$

446.7

$

20.8

4.7

%

Total margin (a)

$

270.0

$

275.9

$

(5.9

)

(2.1

)%

Partnership operating and administrative expenses

$

227.4

$

217.2

$

10.2

4.7

%

Operating income

$

4.6

$

18.3

$

(13.7

)

(74.9

)%

Partnership Adjusted EBITDA

$

58.4

$

64.6

$

(6.2

)

(9.6

)%

Retail gallons sold

195.0

202.8

(7.8

)

(3.8

)%

Heating degree days - % (warmer) than normal

(11.7

)%

(7.5

)%

Capital expenditures

$

20.9

$

18.7

$

2.2

11.8

%

Retail gallons sold decreased due to temperatures that were 11.7%
warmer than normal and 4.6% warmer than the prior year. Temperatures
in the critical month of April were 17.1% warmer than normal and 10.6%
warmer than the prior year.

Partnership operating and administrative expenses were higher than the
prior year reflecting a $7.5 million environmental accrual associated
with the site of a former manufactured gas plant, a settlement with
one of AmeriGas' insurance carriers ($5.5 million), partially offset
by lower group insurance expenses ($2.2 million).

UGI, through subsidiaries, is the sole General Partner and owns 26%
of AmeriGas Partners, L.P.

UGI International:

For the fiscal quarter ended June 30,

2017

2016

Increase (Decrease)

Revenues

$

351.3

$

395.5

$

(44.2

)

(11.2

)%

Total margin (a)

$

173.1

$

215.8

$

(42.7

)

(19.8

)%

Operating and administrative expenses

$

141.1

$

154.9

$

(13.8

)

(8.9

)%

Operating income

$

0.5

$

33.5

$

(33.0

)

(98.5

)%

(Loss) income before income taxes

$

(5.2

)

$

27.7

$

(32.9

)

(118.8

)%

Finagaz integration expenses

$

7.0

$

4.5

$

2.5

55.6

%

Adjusted income before income taxes

$

1.8

$

32.2

$

(30.4

)

(94.4

)%

Retail gallons sold

158.6

169.9

(11.3

)

(6.7

)%

Heating degree days - % (warmer) than normal

(13.7

)%

(6.1

)%

Capital expenditures

$

19.1

$

25.9

$

(6.8

)

(26.3

)%

Base-currency results are translated into U.S. dollars based upon
exchange rates experienced during the reporting periods. During the 2017
period, the euro was approximately 2% weaker versus the U.S. dollar, and
the British pound sterling was approximately 10% weaker, compared with
the prior-year period. The effects of the weaker currencies did not
negatively impact UGI International net income due to gains on foreign
currency contracts.

Total retail gallons sold were lower than the prior year, principally
reflecting the effects of weather that was approximately 13.7% warmer
than normal and 8.1% warmer than the prior-year period.

Total margin was lower than the prior year primarily due to lower
average retail unit margins and the lower volume.

Operating expenses decreased primarily due to lower expenses in France
reflecting expense synergies associated with the Finagaz acquisition,
lower maintenance and logistics expenses, and the translation effects
of weaker currencies, offset in part by higher integration expenses.

Operating income and income before taxes decreased reflecting the
lower total margin partially offset by the lower operating and
administrative expenses.

Midstream & Marketing:

For the fiscal quarter ended June 30,

2017

2016

Increase (Decrease)

Revenues

$

222.8

$

166.0

$

56.8

34.2

%

Total margin (a)

$

33.4

$

41.9

$

(8.5

)

(20.3

)%

Operating and administrative expenses

$

23.1

$

22.7

$

0.4

1.8

%

Operating income

$

2.8

$

11.3

$

(8.5

)

(75.2

)%

Income before income taxes

$

3.3

$

10.9

$

(7.6

)

(69.7

)%

Heating degree days - % (warmer) colder than normal

(22.9

)%

4.3

%

Capital expenditures

$

21.7

$

36.3

$

(14.6

)

(40.2

)%

Temperatures across Midstream & Marketing's service territory were
22.9% warmer than normal and 26.1% warmer than the prior year.

Operating income and income before taxes decreased primarily
reflecting the decrease in total margin, higher depreciation expenses,
and slightly higher total operating and administrative expenses,
partially offset by other income largely attributable to allowance for
funds used during construction ("AFUDC") associated with pipeline
expenditures.

UGI Utilities:

For the fiscal quarter ended June 30,

2017

2016

Increase (Decrease)

Revenues

$

146.6

$

140.3

$

6.3

4.5

%

Total margin (a)

$

93.6

$

94.8

$

(1.2

)

(1.3

)%

Operating and administrative expenses

$

52.0

$

46.1

$

5.9

12.8

%

Operating income

$

27.7

$

29.8

$

(2.1

)

(7.0

)%

Income before income taxes

$

17.5

$

20.7

$

(3.2

)

(15.5

)%

Gas Utility system throughput - billions of cubic feet

Core market

8.7

10.3

(1.6

)

(15.5

)%

Total

46.5

43.6

2.9

6.7

%

Gas Utility heating degree days - % (warmer) colder than normal

(21.2

)%

11.9

%

Capital expenditures

$

79.1

$

56.5

$

22.6

40.0

%

Gas Utility service territory experienced temperatures that were
approximately 21.2% warmer than normal and nearly 30% warmer than the
prior year; weather in the important month of April was 43.6% warmer
than the prior year.

Operating and administrative expenses were higher than the prior year
primarily due to higher customer accounts and slightly higher
distribution and other operating expenses.

Operating income decreased reflecting the lower total margin, higher
operating expenses and higher depreciation and amortization expenses,
partially offset by a $5.8 million environmental insurance settlement.

(a)

Total margin represents total revenue less total cost of sales and
excludes pre-tax gains and losses on commodity derivative
instruments not associated with current period transactions. In the
case of UGI Utilities, total margin is reduced by revenue-related
taxes.

About UGI

UGI is a distributor and marketer of energy products and services.
Through subsidiaries, UGI operates natural gas and electric utilities in
Pennsylvania, distributes propane both domestically and internationally,
manages midstream energy and electric generation assets in Pennsylvania,
and engages in energy marketing in ten states and the District of
Columbia. UGI, through subsidiaries, is the sole General Partner and
owns 26% of AmeriGas Partners, L.P. (NYSE:APU), the nation's largest
retail propane distributor.

UGI Corporation will hold a live Internet Audio Webcast of its
conference call to discuss fiscal 2017 third quarter earnings and other
current activities at 9:00 AM ET on Thursday, August 3, 2017. Interested
parties may listen to the audio webcast both live and in replay on the
Internet at http://www.ugicorp.com/investor-relations/events-and-presentations/default.aspx
or at the company website http://www.ugicorp.com
under Investor Relations. A telephonic replay will be available from
12:00 PM ET on August 3rd through 11:59 PM ET on August 10th. The replay
may be accessed at (855) 859-2056, and internationally at (404)
537-3406, conference ID 5913522.

This press release contains certain forward-looking statements that
management believes to be reasonable as of today’s date only. Actual
results may differ significantly because of risks and uncertainties that
are difficult to predict and many of which are beyond management’s
control. You should read UGI’s Annual Report on Form 10-K for a more
extensive list of factors that could affect results. Among them are
adverse weather conditions, cost volatility and availability of all
energy products, including propane, natural gas, electricity and fuel
oil, increased customer conservation measures, the impact of pending and
future legal proceedings, liability for uninsured claims and for claims
in excess of insurance coverage, domestic and international political,
regulatory and economic conditions in the United States and in foreign
countries, including the current conflicts in the Middle East, and
foreign currency exchange rate fluctuations (particularly the euro),
changes in Marcellus Shale gas production, the availability, timing and
success of our acquisitions, commercial initiatives and investments to
grow our business, our ability to successfully integrate acquired
businesses and achieve anticipated synergies, and the interruption,
disruption, failure, malfunction, or breach of our information
technology systems, including due to cyber-attack.UGI undertakes
no obligation to release revisions to its forward-looking statements to
reflect events or circumstances occurring after today.

Corporate & Other includes, among other things, net gains and
(losses) on commodity and certain foreign currency derivative
instruments not associated with current-period transactions and the
elimination of certain intercompany transactions.

(b)

Income tax expense for the nine and twelve months ended June 30,
2017 includes the beneficial impact of a $27.4 million adjustment to
net deferred income tax liabilities associated with a change in the
French income tax rate and an income tax settlement refund of $6.7
million, plus interest, in France.

Management uses "adjusted net income attributable to UGI" and
"adjusted diluted earnings per share," both of which are non-GAAP
financial measures, when evaluating UGI's overall performance. For
the periods presented, adjusted net income attributable to UGI is
net income attributable to UGI Corporation after excluding net
after-tax gains and losses on commodity and certain foreign currency
derivative instruments not associated with current period
transactions (principally comprising changes in unrealized gains and
losses on derivative instruments), Finagaz integration expenses,
losses associated with extinguishments of debt and the impact on net
deferred tax liabilities from a change in French corporate income
tax rate. Volatility in net income at UGI can occur as a result of
gains and losses on commodity and certain foreign currency
derivative instruments not associated with current period
transactions but included in earnings in accordance with U.S.
generally accepted accounting principles ("GAAP").

Non-GAAP financial measures are not in accordance with, or an
alternative to, GAAP and should be considered in addition to, and
not as a substitute for, the comparable GAAP measures. Management
believes that these non-GAAP measures provide meaningful information
to investors about UGI’s performance because they eliminate the
impact of (1) gains and losses on commodity and certain foreign
currency derivative instruments not associated with current-period
transactions and (2) other significant discrete items that can
affect the comparison of period-over-period results.

The following table reconciles net income attributable to UGI
Corporation, the most directly comparable GAAP measure, to adjusted
net income attributable to UGI Corporation, and reconciles diluted
earnings per share, the most comparable GAAP measure, to adjusted
diluted earnings per share, to reflect the adjustments referred to
above: